Food and Beverage marketing is a comPlex and fascinating subject with many

components. This chapter can only provide an introduction to marketing strategies and
options. Feasibility studies will be discussed first, followed by a section covering ongoing
marketing research. Marketing research should be conducted prior to the construction of
a food service facility and continued throughout the life of the business. A marketing plan
based on marketing research is covered next. The chapter concludes with a discussion
of the three major tools used to reach a marketing olans objectives : sales, advertising,
and public relations and publicity.
Fea sibil it y Stu dies
A .fe asi bili t y stud y is ge nerall y con ducte d before a food service
facilit y is co nstructed . Poten tia l investors decide whether or not to fiance
the construction of a proposed facilityoften referred to as a "project" at this
stage by evaluating the results of the feasibility study: The results of the
study also guide the planners and architects of the project, and assist
managers as they develop marketing plans and prepare initial operating
budgets.
Feasibility .studies are generally prepared by organizations such as public
accounting firms, real estate companies, or management consulting
organizations that have been commissioned by the developers or potential
owners. Although developers and potential owners may con.duct feasibility
studies themselves, an independent consultant usually conducts the study if
outside financing is. necessary. While the scope of a feasibility study varies
from project to project, the following functions are common to most studies:
identifying market area characteristics
Evaluating the proposed site
Analyzing the competition
Estimating demand
Projecting operating results
Identifying Market Area Characteristics
Market area characteristics include demographic information on potential guests
in the general area of the proposed site. Useful demographic information on a
potential guest includes age, sex, marital status, number of children, family income ,

type of employment, and location of residence. Other market area

characteristics May include the areas volume of retail sales, the nimber and types
of industrial and commercial businesses, the impact of tourism; and available
transportation.
Generaliv, only those characteristics that relate to the success or failure of t
project are presented in the study However, while most feasibility studies present the
same market area characteristics, the degree to which each is covered depends on
that characteristic's perceived importance to the proposed facility.
In addition to presenting current market area statistics, a feasibility study analyzes
positive and negative trends that may affect demand. for the proposed facility. For
example, the economic stability of the area's commercial and industrial enterprises has
a direct bearing on the future success of the facilityespecially if those enterprises are
primary demand generators for the facility. Also, if the area surrounding the proposed site
is experiencing an economic decline, the area's possible physical deterioration could
make the project site an undesirable location.

CNG
Evaluating the Proposed Site
The site for a proposed food service facility is one of the most important variables
determining the eventual success (or failure) of the operation. A restaurant that offers
quality food and friendly service in an inviting atmosphere with beautiful decor will
typically fail if it's in a poor location. On the other hand, a poor-quality restaurant
may succeed in the short run if it's in a great location.
A feasibility study evaluates the project site and area by researching the
number of people (1) in the surrounding metropolitan area, (2) living or working
within walking distance, and (3) within easy driving distance. Other factors
analyzed by the study include the availability and convenience of parking, traffic flow
patterns, distances from exits off main highways, and the location of other
attractions that draw guests such as shopping malls, banks, movie theaters, and
other food service operations.
The study should also analyze the accessibility of the proposed site. Turning
against oncoming traffic or having to cope with one-way streets may be bothersome,
but not necessarily damaging to business. However, in a highly competitive market,
restrictions on turns into and out of the site, as well as other accessibility
inconveniences, may lower guest demand.
Analyzing the Competition
The competition analysis section of a feasibility study presents an inventory of all
competing food and beverage facilities in the project's market area. Competition may
consist of not only freestanding establishments, but also restaurants and meeting
rooms located in office buildings, private clubs, and social and fraternal organizations.
Sometimes, the analysis of competition is confhled to the immediate vicinity of
the proposed site. However, when the facility isplanned to have a special
uniqueness, it's likely to attract guests from a wider area.
A fesibility study generall analyzes each competitor's:
-

Location (proximity of competitors to the proposed site)

Type of restaurent
Source and volume of business
Days and hours of operation
Menu prices
Check average
Type of service

Number of seats
Availability of liquor service
Entertainment
Promotional efforts
Chain affiliation

BI
The feasibility study should also show hoe long each competitor has operation
ated at its location, how busy each competitor is at various meal periods on different
days of the week, and how current guests feel about the food and service provided by
each establishment.
The competition analysis helps establish pre-opening marketing strategies for the
proposed food service facility. For example, the results of a feasibility study can help
determine.
- The type and volume of demand for both food and beverage service
- The adequancy with which the competition satisfies the current demand
- The strengths and limitations of the competition
- The points of difference that must be established between the proposed facility
and the competition
The results of the competition analysis can also be useful in guiding the design of
the proposed facility, planning the menu and the type of service, establishing proces,
determining hours of operation, and developing advertising and promotion strategies.
Estimating Demand
Making an estimate of food and beverage demand begins with an analysis of the
market areas restaurent and bar sales. This provides an overview of dining trends and
market demands. Data for this analysis can be gathered by surveying potential guests
about their restaurent, banquet, and meeting room needs.
Surveying can be accomplished by the feasibility study consultant through
personal interviews or direct mail questionaires. Potential guests are asked about their
food preferences; how often the dine out; how far they are willing to travel when dining
out; how much time the spend on breakfast, lunch, and dinner, and how much money
they are willing to spend at a food service facility for each mea period.
Projecting Operating Results
Most feasibility studies project financial results for the first, second, and (sometimes)
third year of operation. Potential investors need this information in order to decide
whether to finance the facility's construction.
Generally, investors expect forecasts of food and beverage revenue and
estimates of expenses for such categories as administration, labor, marketing,
facility maintenance, energy costs, rent, insurance, and property taxes. While not all
consultants use the same methods, nor give the same amount of detail, the
feasibility study should clearly explain the basis of the estimate for each major
revenue and each major expense category. Information from this section of a
feasibility study often guides managers in planning the budget for the facility's
first year of operation.
Studies Must Be Current
Feasibility studies are often conducted long before construction actually takes

place. Given the dynamics of the economic environment, a feasibility study

completed six months ago may not be of much value, unless the data the study's
conclusions were based on has not significantly changed. Even then,. it's often iffictilt
to determine that the data has not changed without conducting further marketing
research. The fact that feasibility studies can become dated so quickly emphasizes
the need for food service facilities to conduct ongoing marketing research.

O n go i n g M a r k e t i ng R e s e a r c h
After a food service facility is constructed and in operation, ongoing marketing
research must be conducted to ensure that the businessmeets the needs and wants of
guests.' This type of research also provides the basis for developing an effective
marketing plan. Ongoing marketing research typically includes a property analysis, a
competition analysis, and a market analysis. (Combined, these analyses
constitute situation analysis.)
Property Analysis
A property analysis is a written, unbiased appraisal of a food service operation s
production and service areas, products, and services. Such an analysis is used to
assess the strengths and weaknesses of the operation. The building's exterior, the
landscaping, and the property's sign should be included in the analysis. The facility
should also be carefully evaluated in terms of traffic flow, accessibility, eye appeal, and
compatibility with local surroundings.
The property analysis should also assess the operation in terms of the catego ries listed
in the competition analysis section of the feasibility study: location,type of restaurant,
source and volume of business, days and hours of operation, etc. Sta-tistics on these
categories will enable managers to make meaningful comparisons between the property
and the competition.
However, a property analysis should be more than a simple checklist. It's important to
think about the property from the guest's perspective. In other wor ds, management
should try to see the facility as guests see it. Friends of rnanagement.

TRANSLATE
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